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Even if you have a car that gets 30 MPG, it'll cost you $100 to go 300 miles!
Consider 40 MPG and you can go a whopping 400 miles for the same $100.
When a gallon of Gas cost $1.50 in 2002, the normal inflation on that $1.50 should have been $1.78 today. That's simplistic but shows that inflation is not predictable with a non-renewable energy commodity.
Hope you can walk to work by 2015. Back to Smallsville USA!
Regards,
OW
It DOES kind of seem like an attitude of "how DARE you find an alternative to our gas pumps!" doesn't it?
Where is this? Two days ago I paid $4.05 for REGULAR.
Not sure what you mean by rich, but the prices are impacting a good portion of the people in the lower income ranges. Folks making over $250,000 are probably not as concerned as folks making $60,000 or so a year.
This is kind of part of the problem...if fuel becomes a privilege then so does working for many people who have no access to alternative transportation or mass transit.
The best time to buy a larger vehicle is when gas prices are high. You want to buy a vehicle when it is not as popular!!! You sell a vehicle when it is popular to get maximum benefit.
I'm actually considering buying a Nissan Rogue now...with gas prices so high, I should be able to get one way under invoice...and do even better if I wait for the 09s to show up and take a leftover 08. It's really one of the highest-MPG non-hybrid SUVs around, but it's still an SUV and people will probably be scared of it.
The oil bubble we are in may burst in a few weeks or months. My bet is around Fall we could have a 30 or 40 cent correction.
Why? People are still willingly paying...even if the price of oil goes down they have no real reason to lower prices that significantly, since people have proven they'll still pay it.
I love these solutions...NOT! There are tons of reasons why most people can't live on one income...like a sales job that pays by commission, for example, which pays well, but unsteadily. Not to mention trying to sell a house in this wonderful credit crunch/housing crisis we're having now....EVERYONE who has suggested "relocate a mile from work" seems to be forgetting that part of today's economic issues (not picking on you specifically Kernick: others have been saying it too). Usually to buy a house people have to sell theirs, and in this market, they're not easily going to be able to. So everyone can just throw that suggestion out...people will continue to live where they are in relation to work. :shades:
If your family income is $60k per year and $4 gas puts you in a bind, you are living above your means.
the best time to buy an economy car is when prices are low.
That is excellent advice. Taking on a big payment to save a little bit on gas makes NO sense at all. Taking a big loss on an SUV to save on gas is also crazy. For those that can remember the late 1970s and early 1980s, it would be good to reflect. That was a MUCH tougher time for the working man to find and buy gas.
If you have a big SUV or PU truck and gas is squeezing your budget. Think before you take off to the store. Combine your trips. I used to go to Costco 3-4 times per week when I lived 3 miles away. I am now 14.8 miles away and I go once every 2-3 weeks. I would much rather putz around in my garden than fight all that traffic anyway.
I think you are wise to spend that time with your children. Many people are looking at the cost of a second commute and the daycare. My daughter gave up her job as an Escrow Officer to stay home with my grandson. It was not easy on one salary. They do not regret making the adjustment.
- Cobalt XFE stickshift, no options except sat-radio/ABS/cruise-control/airbags.
(I like the yellow ones).
- the current Malibu Hybrid, and the two-mode malibu hybrid next year.
(I'll take one in blue - Maliblue.
Unfortunately, that describes an awful lot of people. Isn't living beyond your means the American way? :sick: Plus, it's not just the rising gas prices that are pinching people, but the rising prices of just about everything else that requires gas, or Diesel, to deliver it to the store.
If you have a big SUV or PU truck and gas is squeezing your budget. Think before you take off to the store. Combine your trips.
That's what I've been trying to do. If I need to stop off at the grocery store or gas station, I make sure to do so on my way home from work, instead of making a special trip out there. Another minor thing I've started doing is making one beer run per week instead of two, and just doubling up my purchase. I was worried that we'd just start drinking more, since there would be more easily available, but that hasn't been the case, so far.
When I go to the liquor store after work, I actually have to pass my house, drive two miles out to the store, and then two miles back. Now four miles might not seem like much, but cutting out one 4 mile trip per week comes out to 208 miles savings per year. With my Intrepid, that would be a savings of about 10-12 gallons, or $40-48 at $4.00 per gallon. Not a HUGE savings; it won't mean the difference between Beverly Hills or a cardboard box. But it helps a bit. And with my '79 NYer or '85 Silverado, the savings is more like 17-20 gallons, or $68-80 per year.
Yeah, that was bad, but if it's any consolation, you're not the first to think of it. My first car was a 1980 Maliblue. And yes, it got called that. :P
The economics of it are easy to measure, and I freely admit that it often appears to not make much sense to choose to live on one rather modest salary. But even that appearance is heavily grounded in lifestyle.
There are the intangible elements as well. Time with the kids, the benefit to the kids of having a parent being the primary caregiver, the flexibility afforded regarding time, being able to more easily or readily maintain a household, etc. These are more difficult to measure, but we have considered it worthwhile.
Why are you driving to the liquor store every day after work? Just go once a month. Buy a case of Jack or whatever you drink... a keg/case of beer... ration it out the remainder of the month. Then you don't have to worry about that cardboard box, due to wasting all that gas money.
Probably more than that since for most vehicles the mpg is considerably worse for the first few miles.
I don't believe that! In order for that to happen 1) the supply of oil would have to be dropping quickly, and I haven't seen that predicted by the DOE, and 2) the demand for oil and gasoline would have to stay fairly high.
Since you see that people are already cutting back at $3.75/gal, you would see more and more reduction in demand as the price goes higher. It is very simplistic to think that demand will remain the same; the poorer people of the world and this country will be squeezed out of the market, well before $10/gal, thus reducing demand.
Every time prices rise (or fall) an unusual amount, 'experts' come out of the woodwork, put a ruler on the trend, and claim that world-wide ruin is around the corner because 'in 5 years prices will double/triple/whatever'. Every time in the past, those trends have proven to be unsustainable. We'll see....
Yep I don't know the particulars and if that's a solution for them. I just know that some 2-income families are really not making anything extra when you subtract all the expenses (daycare, car, lunch, clothes, higher tax rates ...) of the 2nd person working. I'm just suggesting to run the numbers.
Usually to buy a house people have to sell theirs, and in this market, they're not easily going to be able to.
Yes but if you price your house right it'll sell, and then you also can buy a house priced right. The disadvantage - low price, you have to put up with as a seller, is the same advantage you then have as a Buyer. So it should be a "wash".
And everyone doesn't own; I rent 4 miles from work, and am moving into a house 1 mile further. Oil heat though! But I have a lot of trees, a woodstove, and a new chainsaw.
but I do appreciate the kudos.
Some folks are in more difficult situations. Single parents, limited extended family, and various other issues certainly play a part in all this.
You're forgetting the other part...they have to find a seller who will be able to get credit, even if they do price it "right.". Today, that is a significantly more difficult task. By the same token, most people who own are more likely to lose money on their current house because of the current market...not even getting into the recent mortgages people might have pulled, etc. The "right" price is going to have to be somewhere below market for it to sell quickly, and the house that the person buys is NOT going to be below market. So it isn't a wash...pretty much any way you slice it, you take a hit somewhere. You need to factor that hit in.
I rent too. Problem with renting is the lease...you have to wait until it's up, because the way they're written, you're stuck.
For instance, say last year the market set the value on the house at $175k. This year the market sets it at $168k. That looks like a $7k loss. The house sells at $165k, so it looks like an even larger $10k loss. But they bought the house 7 or 8 years ago for $125k. That is a very reasonable 4% appreciation per year. That $10k loss is just vapor.
"Why are you driving to the liquor store every day after work? "
The post said the beer run is currently once a weak (not every day) and the new plan is to change that to once every two weeks.
"Probably [uses] more than that [gas mileage] since for most vehicles the mpg is considerably worse for the first few miles. "
Again, he said he goes straight from work. The car is already warmed up.
Still, it's amazing how one little change like that can add up over a years period. Even if not for the individual, for everyone as a whole. I've mentioned this before, but if 1 million drivers saved 1 gallon a week, that would be 52million gallons saved a year. Think how little it takes to save a gallon a week! Maybe slowing from 75 to 72 miles per hour? Or one less trip to town? Simple stuff.
I have a good friend that is a Real Estate broker. We were getting ready to list our old home. I wanted to wait for a turnaround. He claims that houses are moving pretty well here in San Diego. He has 5 in escrow so far this month. He said the lenders have loosened the purse strings and there are 95% loans being let. I would imagine you have to prove you can pay. Unlike the past where you told the lender that you could handle the payment and they did not research your income. I think the day of "No stated Income" is history. That and ARMs caused the current mess in housing and also the inflation of homes.
Sorry, I might have worded that first post a bit awkwardly. I'm currently making one beer run per week, which I started doing about a month ago. Prior to that, I had been making two runs per week, usually Monday and Friday after work.
Another habit I might start getting into is changing my banking habits. The bank is about 4 miles away, or 8 miles, round trip. If I have to go up there, I'd usually do it on a Saturday morning, before it gets too crowded. However, I can actually walk to the bank from my office. It's maybe a 10-15 minute walk, depending on how ambitious I feel that day. So if I do it during a workday, I'm cutting out roughly 8 miles of driving, which in one of my old cars would save maybe 2/3 to 3/4 of a gallon. Or in my Intrepid, maybe 2/5?
This wouldn't be a weekly savings, though, as my trips to the bank are actually pretty random, but usually at least once per month.
Now that I know you have all that beer at your house I may come and visit...if it doesn't take too much gas to get there.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
As far as the tight credit market reducing prospective buyers that is really only compared to the loose credit market that created unqualified prospective buyers. The tighter market amounts to correcting a past mistake. It's a good thing.
We use around 140 billion gallons of gasoline in this country a year. 52 million gallons equates to about 3 hours of consumption.
I have a lease also in a 96-unit complex, and it is fairly common that you can leave early if you notify them a couple of months in advance. In fact if you're living in an area where there are a lot of foreclosures, rentals are booming, and I'm sure they'd like you to leave, to raise the rent for a new tenant. My lease ran thru Oct., and I asked, and they agreed to - the end of June.
As I said before the cost of gas is small compared to the cost of heating a home. The home I'm buying used 800 gal/year last year, even with the a new efficient oil furnace; though it is tied into heating water for the house. In driving I probably use 1/2 that.
So saving heating oil is much more a priority to me than gasoline.
Agree with all you said. Just like trading in your 3-yr old Trailblazer for a 3-yr old Cayenne. With gas prices the way they are though, I'll wait for the 3-yr. old hybrid Cayenne (about 2014?)
Government directly subsidizes oil consumption through preferential treatment in tax codes. A multitude of federal corporate income tax credits and deductions results in an effective income tax rate of 11% for the oil industry, compared to the non-oil industry average of 18%
Who do you think proposes these tax codes? I fault governement and Big oil - it's organized crime imo.
Do I refuse my tax deductions? No of course not, but I don't have lobbiest in Washington shaping policy on my behalf.
If we all decided (providing we could do so) to work from home one day a week to cut our consumption 15% or so, would prices fall?
Nope. Because the speculators already work from home. :shades: They'll figure on usage dropping and decide they have to make more per barrel....prices would probably go up.
You see, the demand side of the equation when it comes to oil is fuzzy at best. That's why it's not really a supply/demand thing. First of all, the supply is controlled by a monopoly cartel of oil companies. Second, the demand is controlled by the speculators, several nations who subsidize their fuel as part of their energy infrastructure...and American consumers, the only ones who pretty much stand alone.
Compared to the other two, we ain't much of a nothing, are we? Think of it this way...those countries have collectivized bargaining agreements..kind of like unions. The speculators have their dark, smoky back room they all gather in, but are united as a power bloc. We on the other hands are individuals, and our power to affect this market is sharply limited because of that.
Yet we still pay less than any other country that has a comparable standard of living. If whining was an Olympic sport the Americans would dominate. We wouldn't even have to field our best team. We could just pick people at random and they'd still be a lock for the gold.
Since you see that people are already cutting back at $3.75/gal, you would see more and more reduction in demand as the price goes higher. It is very simplistic to think that demand will remain the same; the poorer people of the world and this country will be squeezed out of the market, well before $10/gal, thus reducing demand
In your comments you're ignoring the normal growth of our population and in our economy. Yes people are cutting back now because of a lot of pressures, near recession, low housing prices, credit crunch, fear of job loss and high fuel prices. However this bad period will not last forever and we will recover an start spending again, travelling again...BUT...in 10 years there will be 12-16% more of us in this country demanding fuel. That means that instead of 21 mm bpd we will need 23-24 mm bpd. It's just not out there to get at a low price.
But even moreso the growth in usage in China, India and Asia are going to be far more than ours. This is guaranteed because their policies of price controls encourages usage. Unless you find a way to tell them to stop growing and/or stop using then they are going to take all the fuel we 'conserve' and then some.
You can ignore the signs if you wish, just don't be surprised. I'm planning on it being $10/gal by 2020 unless something horrible occurs and then I see rationing as a real possibility....again.
Not anymore we don't. Take one look at China...if they're not at our standard of living yet they're getting pretty close. That's just one example.
No demand (as in actually buying, and not just wanting) is not constant/person; it is dependent on price. If the price goes up demand/person drops. Probably every household under $150,000/year will drop their demand as prices rise; people who are making $50,000/year may cut their demand in 1/2 by the time gas reaches $5/gal.
But even more so the growth in usage in China, India and Asia are going to be far more than ours. This is guaranteed because their policies of price controls encourages usage.
Guaranteed? Come on your smarter than that. You're taking the current situation and extrapolating that simplistically. Do you think these countries have unlimited funds to subsidize increasing prices and increasing usage?
You can ignore the signs if you wish, just don't be surprised. I'm planning on it being $10/gal by 2020 unless something horrible
I could see $10/gal 12 years from now - adjusted for inflation and increasing demand. But I figured people here are talking unadjusted (2008) dollars and happening much sooner. I figure I'll be making 2X my salary in 2020 also.
Is there an emerging middle/upper class in China? Sure. But, on average, they are nowhere near the west re: standard of living.
Edit: How about 1/10 the US per-capita GDP (China about $5,000, USA about $46,000).
If I had to bet I'd say it will be at least $10 by 2020, maybe sooner. However if gas prices stay high for the next 12 years I don't think it will be that big a deal. The average person is not going to run out and buy a new car, change jobs or move just because gas prices have risen. However over a 12 year period these kind of life changing events just naturally take place. And the price of gas will figure more prominently into the decision than it did the last time you bought a new car, changed jobs of moved. The result is that 12 years from now people will have gradually adjusted their lifestyles so as to be less impacted by high gas prices.
I also think, or at least hope, that by 2020 we will have more options. Public transportation will have been improved and expanded. EVs, whether powered by batteries, fuel cells, ultra-capacitors or some yet to be discovered storage device will be a viable option for many. So my crystal ball tells me that by 2020 we will have much higher gas prices but we will be using considerably less on a per capita basis resulting in us spending no greater percentage of our income on gas.
I certainly hope you are wrong about rationing. I remember the price freezes of the late 70's, which were disastrous. I think there was also an even/odd form of rationing based upon your license plate.
Hmmm...for Exxon, 2007 revenue about $400B, expenses (including $70 of sales and other taxes) $330B, income before income taxes $70B, income taxes $30B, net income $40B (only 10% of revenue). I can't get to an 11% number, can you?
The vast majority of the USA isn't like NY, so what? Besides Beijing, you need to look at cities like Guanzhou, Shenzen, and the other major industrial cities there, where their standard of living is at, and in a few rare cases, ABOVE ours. Why do you think there's such a big market for cars appearing there? Why do you think they're sucking up all the oil that we feel entitled to?
Speaking of making your hair stand on end try a taxi there!
I am sure the third world populations will drive energy use to levels we can not forecast but $10/gallon is quite possible in that time frame. By then Milk will be at $15/gallon.
The mark that you are bitten by the change? When you are surprised that you are surprised!
BTW, heard an energy consultant on Bloomberg News at lunch today regarding cause for the Diesel fuel escalation past gasoline. It seems the European refiners are over capacity even though they are skewed to refine a greater percentage of No 2 than other world refineries which formula calls for higher gasoline over diesel.
Regards,
OW
It's not the end of the world just as we know it now!
Regards,
OW
You're really serious? What do you base that on?
A couple of friends of mine live there. You know, people from other countries tend to be shocked by the poverty here too.
I will say that the amazing thing was that you would see such a place next door to another apartment building that would rival any modern building over here (except that you can't drink the water).
A friend of mine has been over there a couple of times. He was stunned at the difference. Said in 6 years they had made twenty years worth of progress. Well, it's been six years since I was there so who knows?
BTW - the deep rural South would certainly give anywhere a run for their money, or lack thereof, in terms of poverty.
If they parted-out some of those cars/trucks on their property they'd be making some serious $. Most people in rural areas have 5-10 vehicles dating from the Model T, in their yards?